From the introduction of T-Levels to the digitalisation of tax administration, there were plenty of significant announcements in the 2017 spring budget regarding the construction industry. But how will the budget affect you? Let’s take a look at some of the key announcements:T-levels The government is set to invest 500m-a-year in new technical qualifications for 16 to 19-year-olds, known as ‘T-Levels’. As it stands, there are around 13,000 courses for students to choose from, but with the introduction of T-Levels will this be reduced to 15 – one of which being construction. In order to fulfil the Chancellor’s objective to get teenagers “fit for work,” T-Level students will spend 50% more time learning than they currently are, and will be offered a minimum of three months practical work experience. It is predicted that this will make access to the job market easier, and is seen by some as strategy to fill the potential skills-gap left after Brexit. The plans are not going to be implemented until 2019, however, so it may take a while before we see any real impact in the construction sector. VAT Fraud As a means of clamping down on supply chain fraud in supplies of labour, the government has announced a consultation on the VAT reverse charge for large payments in construction. HMRC have been monitoring fraud in the construction industry, with organised crime accountable for much of the corruption. Many companies are set up to supply large numbers of labourers, but often vanish without paying VAT, PAYE or CIS deductions on wages. With the new reverse charge mechanism, the payer will account for VAT themselves via HMRC. It is also considering changing the qualifying conditions for gross payment status. Costly software changes may be required if these changes are implemented.Dividends As of April 2018, the total amount of tax-free dividends company directors and shareholders can receive will be reduced from £5,000 to £2,000. For business owners in the construction industry who pay themselves in dividends rather than salary, this is especially bad news. According to figures from Blick Rothenberg, the tax increases per annum are as follows: Basic-rate taxpayer – £225 Higher rate taxpayer – £975 Additional rate taxpayer – £1,143 The changes come as Phillip Hammond looks to bring taxation paid by the sole-traders and small business owners more into line with the taxes paid by employees.Making Tax Digital The tax administration process is moving online, meaning that business owners will soon have to provide quarterly updates on their income and expenditure. Introduced in 2015, the aim of the MTD initiative is to make tax administration faster, simpler and more effective by bringing the process into one place. There are currently two million businesses already using digital accounts, and HMRC have set 2020 as a target year for the system to be fully in place. At the Spring Budget 2017, the government announced that it would put back the start date to 2019 for 3.1 million small businesses.Tax on Employee Accommodation Employee-provided accommodation will soon be subject to tax, national insurance and reporting obligations. This is because worker accommodation is a benefit in kind, and therefore the value is taxable. The tax will apply to small companies or partnerships, but sole traders are exempt. In addition to the value of the accommodation itself, everything from maintenance to heating will be included in the costs. The government is set to publish a consultation on 20 March 2017, which will bring up-to-date the the tax treatment of employer-provided accommodation and board and lodgings.Tax on Diesel could go up Despite reports of a diesel scrappage scheme being introduced, there was no mention of this in the budget. However, Chancellor Phillip Hammond did suggest that taxes may increase on diesel vehicles to tackle toxic air. Any further developments regarding these changes are expected to be announced in the autumn budget. Rap Interiors is an award winning company that excels at delivering stunning interiors across the UK. From office fit outs to school refurbishments, we aim to deliver innovative designs that will transform your space. Got and enquiry? Call us today on 0333 600 1234 or email us at refurb@rapinteriors.co.uk

Request your FREE design consultation

Enter your details below and one of the team will contact you to discuss your requirements.

This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful.

Strictly Necessary Cookies

Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

disable

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again.

3rd Party Cookies

This website uses Google Analytics to collect anonymous information such as the number of visitors to the site, and the most popular pages.

Keeping this cookie enabled helps us to improve our website.

disable

Please enable Strictly Necessary Cookies first so that we can save your preferences!